Krannert Graduate School of Management
Purdue University
MANAGEMENT OF NEW ENTERPRISES
Management 484
COURSE SYLLABUS – FALL 2005
Dr. Timothy B. Folta
Sec. 001: MW 10:30-11:45 am, RAWL 3082
Sec. 002: MW 12:00-1:15 pm, RAWL 3082
Office: 409 Krannert Building
Office hours: MW 1:30 – 2:30 pm
Phone: 765.494.9252
Fax: 765.494.9658
e-mail: foltat@mgmt.purdue.edu
Assistant: Gena Cox: 765.494.4396,
cox2@purdue.edu
http://www.mgmt.purdue.edu/faculty/foltat
COURSE DESCRIPTION:
According to Global Economic Monitor Survey, conducted under the auspices of the Kauffman
Foundation, approximately 1 person in 8 in the US was involved in either starting or managing a
new business. (Interestingly enough, the numbers are higher for men as compared to women and
for African Americans as opposed other ethnic groups.) Many others are actively contemplating
creating a startup, and still others work for small firms. Moreover, even rank and file managers
are increasingly asked to act like entrepreneurs. Sometimes such activity is formalized, in which
case it is dubbed intrapreneurship, or entrepreneurship within the confines of a corporation.
Clearly, the profile of entrepreneurship and entrepreneurs has never been higher. Further,
institutional changes have made it easier for everyone, especially young entrepreneurs to venture
out on their own. You should be especially interested in knowing that a significant number of
Krannert graduates work for themselves or for companies with fewer than 500 people.
Management of New Enterprises (Mgmt 484) is a capstone course that gives you a solid glimpse
at the process of conceiving, structuring and creating a startup. Accordingly, like other courses in
Strategic Management, we take on the perspective of the general manager, who in our context is
the entrepreneur, and draw heavily upon knowledge and skills developed in other courses. Our
perspective is illuminated by a combination of the case method (which approximates an
apprenticeship setting and standard tools are brought to bear on data appropriate to the situation at
hand), contact with master practitioners (where there is an opportunity to appreciate the human
side of the equation and to ask questions) and most importantly, by doing. This last point is
extremely important, since entrepreneurship (like most activities) is most effectively learned by
engaging actively in it. Towards this end all students will actively work on a new business idea
and formulate a business plan for it. This constitutes an important part of the start-up process.
While it is perfectly reasonable to expect that some of these ideas may evolve into new ventures,
success in the course is not dependent on this outcome. Rather, our intent is to lay the
groundwork for those who may wish to be better prepared to become successful entrepreneurs at
MGMT 484: MANAGEMENT OF NEW ENTERPRISES
a future time. Some will gain experience, accumulate capital and contacts, and move fairly
quickly to be involved in entrepreneurial ventures. Others may find that their careers move in
unexpected ways. Even if you plan to begin working with an established organization,
entrepreneurship may later become an attractive alternative.
Entrepreneurship can be both exciting and challenging. Entrepreneurial ventures often pioneer in
the creation of new industries and are major engines of change in our economy. Growth-oriented
smaller firms create most of the new jobs. Many other new firms, although less innovative and
growth-oriented, enable entrepreneurs to control their own destiny and to do the kind of work
they want to do. However, many new ventures fail and others fall short of their founders’ goals.
Much depends on the entrepreneur, and that person’s vision, drive, capabilities, and reputation.
This course should help you to understand what is involved in entrepreneurship. It should be
understood that no single course will make you an entrepreneur. However, this course should
help you to appraise this alternative more fully and to develop capabilities which should help you
be successful if you later follow this path.
CONFIDENTIALITY POLICY
Throughout the semester, students will be exposed to proprietary information from other students
and faculty. It is the policy of the course instructors that all such information is to be treated as
confidential. By enrolling in and participating in MNE, students agree not to disclose this
information to any third parties without specific written permission from students or faculty, as
applicable. Students further agree not to utilize any such proprietary information for their own
personal commercial advantage of for the commercial advantage of any third party.
COURSE REQUIREMENTS
Your course grade is a function of the requirements listed below. Be aware that for team
projects some consideration will be given to how teammates evaluate your performance (see
Appendix B).
A. Participation (20%) – Active participation is an extremely important component of
any case-based class (See case packet note on “Learning and the Case Method” for
explanation of the case approach we adopt here). Entrepreneurship is inherently
collaborative – a social process. Entrepreneurs find opportunities, adapt, change, and
improve themselves by listening and learning from others. Please come to class prepared
to participate in the day’s activities. Coming prepared entails having read the assigned
readings for that day and having analyzed the Participation points will be awarded for
participation in case study discussions only.
How is Participation graded? Every student starts off with a low
“C” (i.e., 70%) for participation and accumulates points through
their contributions to case discussions. Class participation points
are based on the quality of the student’s discussion to key issues in
the case, not on attendance. You can drop below a “C” for
participation if you: (1) demonstrate that you are poorly prepared
for discussion, or (2) have more than two unexcused absences.
Please see instructor for additional work if you miss more than two
case discussions.
2
What is a “quality”
contribution? A
quality contribution
does not recite facts
from the case, but
integrates perspectives
or demonstrates
analytical rigor.
MGMT 484: MANAGEMENT OF NEW ENTERPRISES
B. Special Topic Projects (20%) – Student teams (formed by the instructor) will
prepare a report and give a presentation on a special project. The purpose of this
assignment is to deepen your knowledge on a topic pertinent to the start-up process, and
to share that knowledge with the rest of the class. The topics selected by the instructors
represent critical content for would-be entrepreneurs, and should prove helpful in
completing business plan assignments. The eligible topics are listed below. See
Appendix F for detail, including due dates.
Special Topic
Deciding the Form of Business Entity
Placing a Value on a Start-up
Buying an Existing business
Pricing for Profit
Estimating Sales: Pulling a Rabbit out of a Hat
Financing the Venture: Money, Money, Money!
Angel Investors: You Don’t Have to Die to go to Heaven
Entrepreneurs and Geographic Clusters
Differences in Entrepreneurship Around the World
Appendix
E-1
E-2
E-3
E-4
E-5
E-6
E-7
E-8
E-9
The questions to address in this project are provided in detail at the end of the syllabus.
In general, there are three components to this assignment:
i.
a 5 page report to be handed in to the instructor;
ii.
a 15 minute class presentation; and
iii.
a list of 10 possible quiz questions to be distributed to the class.
C. Quizzes and other assignments (20%)
There will be three quizzes on Special Topics Presentations and Readings. Questions will be
multiple choice and/or true/false.
D. Business Plan (40%)
There are three components to the Business Plan assignment.
1.) Mini-Marketing Proposal (10%). See Appendix A for detail.
2.) Written Business Plan (25%). For a sample outline of this assignment, see the
business plan outline at the end of the reading in your case packed titled,
“Crafting a Winning Business Plan”.
3.) Business Plan Presentation (5%).
While we wish all business plans can result in potentially profitable ventures, it is usually
the exception. Accordingly, we will not evaluate the quality of your plan based on the
feasibility of venture success or the likelihood of profitability. Rather we will evaluate
the quality of your plan base on the thoroughness of the analysis. In the end, you may
decide to “pull the plug” on your venture, or you may decide to modify the venture
concept, or you may decide that there is a strong possibility that you can achieve
profitability by going forward with the venture. You can achieve a high grade under any
of these scenarios, providing that your analysis is comprehensive and accurate.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
GUIDELINES FOR ALL COURSE ASSIGNMENTS (PLEASE READ CAREFULLY)
All assignments must be typed in 11 or 12 pt font and organized for easy reading. Do not exceed
the page limit requirement.
All written work must be submitted by email to instructor before the beginning of class on the
date due. No exceptions. Follow these standards:
 submit in single Word document file labeled as follows: yourlastname_484_assignment
name.
 The subject line of the email should contain the same label in above point.
COURSE MATERIAL
Required course packet: Available in Union.
See Katalyst for daily lecture notes and course handouts.
Website for Online Resources:
http://www.mgmt.purdue.edu/events/entrepreneurship/resources.htm
SCHEDULE AND ASSIGNMENTS
Date
8/22
8/24
8/24 or
8/25
Please
Note
8/29
Content
Module I: What is an Entrepreneurial Manager?
Class 1: Course Introduction
Read: “The Questions Every Entrepreneur Must Answer”, Harvard Business Review, Reprint
96603; “Learning by the Case Method,” Harvard Business School, Case 9-376-241.
Key Learning Objectives:
- Defining entrepreneurship
- Reasons why entrepreneurial opportunities exist
- Importance of entrepreneurship to economy
Class 2: “R&R” Harvard Business School, Case 9-386-01
Key Learning Objectives:
- Nature of entrepreneurial management
- Managing risk and reward
- Renting versus owning resources
- Generating Business Ideas
Class 3: Special Evening Presentation: On either 8/24 or 8/25 you are asked to attend the
video presentation of “Start-up.com”. It will begin at 7 pm on both evenings in RAWLS 1086,
and will last approximately 110 minutes. This will replace a class later in the semester.
Key Learning Objectives:
- Continuous adaptation
- The role and process of venture capital
- Personal rewards and risks
Module II: Getting Started: Fundamentals for the Entrepreneur
II-A Recognizing Opportunity and Developing Business Models
Class 4: Generating Business Ideas
Read: “Creativity, Innovation, and Problem Solving”, http://www.entreed.org/_teach/actcreat.htm
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
8/31
Class 5: “Zipcar: Refining the Business Model,” Harvard Business School, Case 9-803-096
Read: “Why Business Models Matter”, Harvard Business Review, 80(5): 86
Key Learning Objectives:
- Opportunity recognition
- Business models
- Revising business models
9/5
9/7
9/12
NO CLASS – Labor Day
Class 6: Business Concept Presentations – Individual Assignment Due (See Appendix D)
Class 7: “Michael Bregman,” Harvard Business School, Case 9-383-107
Read: “Franchising,” Richard Ivey School of Business, Note 9A99D014
- Assessing business model from perspective of franchisee
Class 8: Guest Speaker
9/14
9/19
9/21
9/26
9/28
10/3
10/5
10/10
10/12
10/17
10/19
10/24
II-B Assembling Resources
Class 9: Appraising Business Plans
Read: “Some Thoughts on Business Plans,” Harvard Business School, Note 9-897-101
“Crafting a Winning Business Plan,” Chapter 10 in Essentials of Entrepreneurship and Small
Business Management, by Thomas W. Zimmerer and Norman M. Scarborough
Key Learning Objectives:
- components of a business plan
- process of writing the plan
Class 10: “Bright Horizons Children’s Centers, Inc. - 1987,” Harvard Business School, Case 9394-031
Key Learning Objectives:
- Employee empowerment
- Family-owned businesses
Class 11: Gathering Primary Data – In class exercise
Class 12: Special Topics Presentations and Reports Due – Team Assignment
- E-1: Deciding the Form of Business Entity
- E-2: Placing a Value on a Start-up
- E-3: Buying an Existing Business
Class 13: “Heather Evans,” Harvard Business School, Case 9-384-079
Read: “Bootstrap Finance: The Art of Start-Ups,” Harvard Business Review, Reprint 92601.
Key Learning Objectives:
- Negotiation
- strategic partners versus financial partners
Quiz over Special Topics Material presented in Class 10, and readings through 9/14.
Class 14: Special Topics Presentations and Reports Due – Team Assignment
- E-4: Pricing for Profit
- E-5: Estimating Sales: Pulling a Rabbit Out of the Hat
- E-6: Financing the Venture: Money! Money! Money!
NO CLASS – October Break
Class 15: “The Knot,” Harvard Business School, Case 9-899-116
Key Learning Objectives:
- Assessing cash needs
- Analysis of a private placement term sheet
Quiz over Special Topics Material presented in Class 12, and readings for Module II-B.
Class 15: Mini-Marketing Plan Presentations and Reports Due – Team Assignment
Class 16: Mini-Marketing Plan Presentations – Team Assignment
II-C Managing Uncertainty
Class 17: “Novazyme: A Father’s Love,” Harvard Business School, Case 9-603-048
Key Learning Objectives:
- Risk reduction as a systematic process
- strategic partnering versus sale
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
10/26*
10/31
11/2
Tentative
11/7
11/9
11/14
11/16
11/21
11/23
11/28
11/30
12/5
12/7
Class 18: Special Topics Presentations and Reports Due – Team Assignment
- E-7: Angel Investing: You Don’t Have to Die to go to Heaven
- E-8: Entrepreneurs and Geographic Clusters
- E-9: Differences in Entrepreneurship Around the World
Class 19: Lecture on Venture Capital
Quiz over Special Topics Material presented in Classes 17
Guest Speaker
Module III – Managing the Growing Venture
Class 21: “Gordon Biersch Brewing,” Graduate School of Business, Stanford University, S-E2
Key Learning Objectives:
- setting priorities in a growth setting
- rapidly growing after deregulation
A. developing internal systems suitable for growth
Class 22: How to Present your Business Plan
Module IV – Realizing Value
Class 23: “Nantucket Nectars,” Harvard Business School, Case 898-171
Key Learning Objectives:
- Go public, stay private, or sell business
- Choosing the right strategic partner and negotiating sale
Class 24: No Class to compensate for evening movie in August
Class 25: Business Plan Presentations
NO CLASS – Thanksgiving Break
Class 26: Business Plan Presentations – Written Plans Due
Class 27: Business Plan Presentations
Class 28: Business Plan Presentations
Class 29: Final Lecture
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
POLICIES REGARDING ACADEMIC INTEGRITY
ACADEMIC INTEGRITY
“Purdue University values intellectual integrity and the highest standards of academic conduct. To be
prepared to meet societal needs as leaders and role models, students must be educated in an ethical learning
environment that promotes a high standard of honor in scholastic work. Academic dishonesty undermines
institutional integrity and threatens the academic fabric of Purdue University. Dishonesty is not an
acceptable avenue to success. It diminishes the quality of a Purdue education which is valued because of
Purdue’s high academic standards” (S. Akers, Academic Integrity, A Guide for Students, 1995, revised
1999).
DEFINITION OF ACADEMIC DISHONESTY
Purdue prohibits “dishonesty in connection with any University activity. Cheating, plagiarism, or
knowingly furnishing false information to the University are examples of dishonesty” (University
Regulations, Part 5, Section III, B, 2, a). Furthermore, the University Senate has stipulated that “the
commitment of acts of cheating, lying, and deceit in any of their diverse forms (such as the use of ghostwritten papers, the use of substitutes for taking examinations, the use of illegal cribs, plagiarism, and
copying during examinations) is dishonest and must not be tolerated. Moreover, knowingly to aid and abet,
directly or indirectly, other parties in committing dishonest acts is in itself dishonest” (University Senate
Document 72-18, December 15, 1972).
PURDUE UNIVERSITY CODE OF HONOR
(University Regulations, Part 5, Section II, 2002-2003)
“The purpose of the Purdue University academic community is to search for truth and to endeavor to
communicate with each other. Self-discipline and a sense of social obligation within each individual
are necessary for the fulfillment of these goals. It is the responsibility of all Purdue students to live by
this code, not out of fear of the consequences of its violation, but out of personal self-respect. As
human beings we are obliged to conduct ourselves with high integrity. As members of the civil
community we have to conduct ourselves as responsible citizens in accordance with the rules and
regulations governing all residents of the state of Indiana and of the local community. As members of
the Purdue University community, we have the responsibility to observe all University regulations.
To foster a climate of trust and high standards of academic achievement, Purdue University is
committed to cultivating academic integrity and expects students to exhibit the highest standards of
honor in their scholastic endeavors. Academic integrity is essential to the success of Purdue
University’s mission. As members of the academic community, our foremost interest is toward
achieving noble educational goals and our foremost responsibility is to ensure that academic honesty
prevails.”
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX A
Mini-Marketing Proposal
There are two components to this assignment: (a) the written proposal; and (b) the presentation.
A. The Written Proposal - The written proposal should be 3-5 pages in length, plus any
exhibits you choose to include. It will be evaluated on the comprehensiveness and clarity with
which you address the following points.
I.
II.
III.
IV.
V.
VI.
SUMMARY – (1-2 PARAGRAPHS SUGGESTED)
A. Brief description of the business
B. Brief overview of the market for your product
C. Brief overview of the strategy to make your firm a success
INDUSTRY ANALYSIS
A. Industry Background and overview
B. Trends
C. Growth Rate
D. Outlook for the future
MARKET ANALYSIS
A. Your company’s target market
1. demographic profile
2. other significant customer characteristics
B. What motivate customer to buy?
C. How large is the market?
D. What are their potential annual purchases?
E. What is the nature of the buying cycle?
1. Is this product a durable good that lasts for years or a product that is
repurchased on a regular basis?
2. Is the product likely to be purchased at only seasonal periods during the
year?
F. Pricing strategies
1. Indicate revenue model – how you will make money
2. Cost structure – fixed and variable
3. Desired image in market
4. Your prices versus competitor’s prices
5. Breakeven level of sales
COMPETITOR IDENTIFICATION - LIST YOUR COMPETITORS HERE
MANAGEMENT TEAM (OPTIONAL)
BRIEF FINANCIALS (OPTIONAL)
B. The Presentation - The presentation should be made by a single representative of the team.
The intent is: i) to inform the class on the progress of your project (we can learn from one
another); and ii) to get feedback from class or instructor. You have about 6 minutes to address:
i.
ii.
iii.
iv.
v.
What is the product or service being offered?
Who is the customer?
What is the benefit?
How do you get the product or service to the customer?
How does your market research lend credibility to your business
concept? How it caused you to redefine your business concept?
What are the limitations to your market research?
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX B
Grades Assigned to Team Members
Example – Team Appraisal
B. Number of team members, including yourself: ___4___________
C. Grades to each Team member* (example below):
Team Member
Points Distributed
1. John Smith
80
2. William Carter
120
3. Jane Locke
125
4. Levi Goldberg
75
Average
100
* The minimum number of points you can assign to a team member is 75 and the maximum number of points you can
assign is 125 (average should be 100).
Written Business Plan – Team Appraisal
A. Number of team members, including yourself: ______________
B. Grades to each Team member*:
Team Member
Points Distributed
Average
* The minimum number of points you can assign to a team member is 75 and the maximum number of points you can
assign is 125 (average should be 100).
Mini-Marketing Proposal – Team Appraisal
D. Number of team members, including yourself: ______________
E. Grades to each Team member*:
Team Member
Points Distributed
Average
* The minimum number of points you can assign to a team member is 75 and the maximum number of points you can
assign is 125 (average should be 100).
Special Topics Project – Team Appraisal
A. Number of team members, including yourself: ______3___________
B. Grades to each Team member*:
Team Member
Points Distributed
Average
* The minimum number of points you can assign to a team member is 75 and the maximum number of points you can
assign is 125 (average should be 100).
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX C
Resources for Developing Business Ideas
Business Opportunities Handbook: Online
Http://www.ezines.com
Features articles about running a small business. Also lists business opportunities
Creativity Web
http://www.ozemail.com.au
Yes, it is located in Australia, where it appears they are very much interested in
creativity. On this site, you will find many articles on various aspects of creativity. It is
you one-stop shop for resources on creativity. Check out the article called “What Can I
do to Increase my Creativity?” to get started. It’s at
http://www.ozemail.com.au/~caveman/Creative/Techniques/intro.htm
Where Really Bad Ideas Come From
http://www.inc.com/articles/details/1,,CID1114_REG6,00.html
This great article by Ron McLean talks about how entrepreneurs learned from their
failures
Where Great Ideas Come From
http://www.inc.com/articles/details/1,,CID908_REG6,00.html
This is a corollary article written by Susan Greco
Thinking up a Storm
http://edge.lowe.org/
A brief article on brainstorming that will help you generate more ideas.
What’s Your Unique Business Idea?
http://www.toolkit.cch.com/text/P03_1010.asp
This article helps you assess whether your idea is viable.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX D
Developing a Business Concept*
A business concept is a concise description of an opportunity that contains four elements: The
product/service, customer definition, value proposition (benefit to customer), and distribution
channel. Assume that your business concept is about importing unique types of furniture from all
parts of the world. By answering the following questions, you can arrive at an effective business
concept that can be tested.
1) What is the product or service being offered? In this case it is a product – furniture –
and a service that will provide U.S. retailers with access to furniture that they could not
achieve on their own.
2) Who is the customer? The customer is the smaller U.S. retailer of furniture.
3) What is the benefit? The retailer can purchase from one supplier (you, the importer) to
find unique pieces of furniture from many parts of the world. In short, the benefits are
convenience and access.
4) How do you get the product or service to the customer? You plan to reach the
customer through a combination of catalog service, web site, and showroom. You will
warehouse the furniture and deliver direct to the customer.
The complete concept statement might look like this:
Worldwide imports provides smaller U.S. furniture retailers with the ease and
convenience of worldwide access to unique pieces of furniture. Worldwide will reach its
customers through a catalog service, web site, and showroom, and will deliver direct to
the customer from its warehouse.
The business concept for Amazon.com was to offer an Internet-based service that
allowed customers to search for and order discounted books for fast delivery from
a warehouse. The company has since extended the concept to other products.
It is important to state your business concept in a couple of clear and concise sentences, so that
when someone asks you about your new business, you can get the information out quickly rather
than stammering and talking around the key points. Some entrepreneurs refer to this twosentence statement as their “elevator pitch”. Here is an example of an effective concept statement
done in elevator pitch style.
I’m working on a concept for a health education company called Smart Choice Software
that helps young college students learn about the dangers of substance abuse. I plan to
develop and distribute interactive software on CE-ROM that delivers objective, nonthreatening, entertaining, and flexible programs to my customers, college an university
health centers, to help them reduce the overall costs of dealing with drug and alcohol
related issues.
* Extracted from Allen, Kathleen R. (2003). Launching New Ventures: An Entrepreneurial Approach, 3rd Edition, Houghton Mifflin
Company: Boston, pp. 103-104.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-1
MGMT 484 Special Topic Assignment
Deciding the Form of Business Entity
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1) Explain the advantages and the disadvantages of the major forms of business
ownership: sole proprietorship, partnership, and corporation.
2) Explain how an S corporation differs from a regular corporation.
3) Explain what advantages a limited liability company offers over an S corporation.
A partnership.
4) Interview three small business owners. What form of ownership did each choose?
Why? Prepare a brief report summarizing your findings, and explain advantages
and disadvantages those owners face because of their choices.
5) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-3 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
9/26 – Provide your list of questions to instructor
9/28 – Provide report and make presentation to class
Sources:
1) Scarborough, Norman M. and Zimmerer, Thomas W. (2003). Effective Small Business Management:
An Entrepreneurial Approach (7th Edition) . Prentice Hall: Upper Saddle River, NJ.
2) Bagley, Constance E. and Dauchy, Craig E. (1998). The Entrepreneur’s Guide to Business Law.
West Educational Publishing Company.
3) Planning and Growing a Business Venture. (2001). Kauffman Center for Enterpreneurial Leadership.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-2
MGMT 484 Special Topic Assignment
Placing a Valuing on A Start-up
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1.) Explain the process of evaluating an existing business.
2.) Describe the various ways of determining the value of a business.
3.) Interview an entrepreneur who purchased an existing business, or an investor
(venture capitalist, angel investor) who contributed capital to a start-up, and ask
the following questions:
a. How did you determine the value of the business?
b. How close was the price paid for the business to the value assessed prior
to the purchase?
4.) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-2 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
9/26 – Provide your list of questions to instructor
9/28 – Provide report and make presentation to class
Sources:
1) “A Note on Valuation of Venture Capital Deals,” Stanford University Note E-95 (In case packet).
2) Smith, Richard L. and Smith, Janet Kiholm. (2000). Entrepreneurial Finance . John Wiley & Sons,
Inc.: New York.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-3
MGMT 484 Special Topic Assignment
Buying an Existing Business
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1.) What advantages can an entrepreneur who buys a business gain over one who
starts a business “from scratch”.
2.) Why is it so difficult for buyers and sellers to agree on a price for a business?
3.) Interview an entrepreneur who purchased an existing business and ask the
following questions:
a. Why did you decide to buy the business instead of start your own
business?
b. What were the “sticky” points during the negotiation?
c. How did you research, or perform due diligence, on the business you
eventually bought?
d. Have you discovered any surprises (positive or negative) about the
business since you have purchased it?
e. Knowing what you know now, would you revise the due diligence process
in any way to avoid the negative surprises?
4.) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-2 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
9/26 – Provide your list of questions to instructor
9/28 – Provide report and make presentation to class
Sources:
1) Scarborough, Norman M. and Zimmerer, Thomas W. (2003). Effective Small Business
Management: An Entrepreneurial Approach (7th Edition) . Prentice Hall: Upper Saddle River,
NJ.
2) Planning and Growing a Business Venture. (2001). Kauffman Center for Entrepreneurial
Leadership.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-4
MGMT 484 Special Topic Assignment
Pricing for Profit
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1.) Describe the strategies (penetration, skimming, and sliding down the demand
curve) a small business could use in setting the price of a new product.
2.) Explain pricing techniques for retailers and provide examples
3.) Explain pricing techniques for manufacturers and provide examples
4.) Explain pricing techniques for service firms and provide examples
5.) Interview two successful small retailers and ask the following questions: Do you
seek a specific image through your prices? What role do your competitors play in
pricing? Do you use specific pricing techniques such as odd pricing, price lining,
leader pricing, or geographic pricing? How are discounts calculated? What
markup percentage does the firm use? What is your cost structure?
6.) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-4 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
10/3 – Provide your list of questions to instructor
10/5 – Provide report and make presentation to class
Sources:
1) Scarborough, Norman M. and Zimmerer, Thomas W. (2003). Effective Small Business Management:
An Entrepreneurial Approach (7th Edition) . Prentice Hall: Upper Saddle River, NJ.
2) Planning and Growing a Business Venture. (2001). Kauffman Center for Enterpreneurial Leadership.
15
MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-5
MGMT 484 Special Topic Assignment
Estimating Sales: Pulling a Rabbit out of the Hat
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1.) What are the four key questions that must be answered in the sales forecast of a
new venture?
2.) Explain the difference between a demanE-side approach to estimating sales in a
new venture, and a supply-side approach. Provide an example of each.
3.) Compare judgmental, time-series, and causal forecasting models.
4.) Interview an entrepreneur who purchased an existing business and ask the them
which sales forecasting method they used to estimate their ventures initial sales.
How close were they to their estimate? What forecasting method do they
currently use? How seasonal is their business, and how do they adjust for
seasonality in their forecasting?
5.) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-3 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
10/3 – Provide your list of questions to instructor
10/5 – Provide report and make presentation to class
Sources:
1) Smith, Richard L. and Smith, Janet Kiholm. (2000). Entrepreneurial Finance . John Wiley & Sons,
Inc.: New York.
2) Adelman, Philip J. and Marks, Alan M. (2001). Entrepreneurial Finance: Finance for Small Business.
Prentice Hall: Upper Saddle River, NJ
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-6
MGMT 484 Special Topic Assignment
Financing the Venture: Money, Money, Money!
You will write a 3-5 page report and make a 15-20 minute presentation on the following
questions.
1.) Why is it so difficult for most small business owners to raise the capital needed to
start, operate, or expand their ventures?
2.) List and describe the three types of capital a small business needs for its
operations.
3.) Define equity financing. What advantages does it offer over debt financing?
4.) What is the most common source of equity funds in a typical small business? If
an owner lacks sufficient equity capital to invest in the firm, what options are
available for raising it?
5.) Interview 3 local small business owners about how they financed their businesses.
From where did their initial capital come? Ask the following questions:
a. How did you raise your starting capital? What percent did you supply on
you own? What percent was debt capital and what percent was equity
capital?
b. How much money did you need to launch your business? Where did
subsequent capital come from? What advice do you offer others seeking
capital?
6.) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-4 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
10/3 – Provide your list of questions to instructor
10/5 – Provide report and make presentation to class
Sources:
1.) Scarborough, Norman M. and Zimmerer, Thomas W. (2003). Effective Small Business Management:
An Entrepreneurial Approach (7th Edition) . Prentice Hall: Upper Saddle River, NJ.
2.) Smith, Richard L. and Smith, Janet Kiholm. (2000). Entrepreneurial Finance . John Wiley & Sons,
Inc.: New York.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-7
MGMT 484 Special Topic Assignment
Angel Investors: You Don’t Have to Die to Go to Heaven
You will write a 3-5 page report and make a 15-20 minute presentation on the following
questions.
1) What is an angel investor? Assemble a brief profile of the typical private
investor. How can entrepreneurs locate potential angels to invest in their
businesses? Describe the angel investment process.
2) Discuss the niche that angel investors fill in the entrepreneurial process.
3) Provide a description of how angel investing is changing and evolving and a
current description of the state of the industry.
4) Contact a local angel investor and ask him or her what kinds of businesses do they
prefer to invest. What screening criteria does he or she use? How are deals
typically structured?
5) Go to the “Band of Angels” website and be prepared to describe how it operates.
http://www.bandangels.com/
6) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-3 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
10/24 – Provide your list of questions to instructor
10/26 – Provide report and make presentation to class
Sources:
1) Scarborough, Norman M. and Zimmerer, Thomas W. (2003). Effective Small Business
Management: An Entrepreneurial Approach (7th Edition) . Prentice Hall: Upper Saddle River,
NJ.
2) Feldstein, Janet. (2002). Angel Investing: Innovation within the Establishment. Stanford
Graduate School of Business Case E-127.
3) Business Angel Investing Groups Growing in North America, Monograph Published by the Ering
Marion Kauffman Foundation, October 2002.
4) Roberts, Michael J; Stevenson, Howard H.; and Morse, Kenneth P. (2000). Angel Investing.
Harvard Business Note, 9-800-272.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-8
MGMT 484 Special Topic Assignment
Entrepreneurs and Geographic Clusters
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1.) What constitutes a geographic cluster of firms?
2.) What are the potential advantages and disadvantages of locating a start-up firm in
a geographic cluster
3.) In what industries does Indiana have geographic clusters of similar firms?
Speculate as to why this might be the case.
4.) Contact a small business owner in one of these industries and ask the following
questions:
a. How does your firm benefit from being located in Indiana, where there is a
concentration of similar firms?
b. Why did you start your firm in this location?
c. Would you consider moving to a new location?
5) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-3 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
10/24 – Provide your list of questions to instructor
10/26 – Provide report and make presentation to class
Sources:
1) Cooper, A.C.; Folta, T.B. (2000). ‘Entrepreneurship and high technology clusters’ (with Arnold
C. Cooper), in Donald L. Sexton and Hans Landstrom (Eds.) Handbook of Entrepreneurship,
Blackwell: Oxford, pp. 348-367.
2) Porter, M. E. 2001. Innovation: Location matters. MIT Sloan Management Review, Summer
2001: 28-36.
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MGMT 484: MANAGEMENT OF NEW ENTERPRISES
APPENDIX E-9
MGMT 484 Special Topic Assignment
Differences in Entrepreneurship Around the World
You will write a 3-5 page report and make a 15 minute presentation on the following
questions.
1.) Provide evidence that nations differ in their rates of entrepreneurship?
2.) What are the reasons for such differences?
3.) Interview 3 people from countries other than your own (reference point) and ask
them to speculate on why their country’s rate of entrepreneurship differs from the
country of reference
4.) Provide a list of 10 possible questions to be included on future quizzes. These
questions should pertain to items 1-2 and be multiple choice and/or true-false.
Make sure your presentation addresses the answers to your questions. Also, make
sure you have provided the instructor an electronic version of these questions.
Due Dates:
10/24 – Provide your list of questions to instructor
10/26 – Provide report and make presentation to class
Source:
Global Entrepreneurship Monitor. http://www.gemconsortium.org/
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